The global advertising technology market has grown strongly over the last year especially post the pandemic-induced surge in online traffic providing significant opportunities for companies to engage their target audience.
Advertisers increasingly invested in programmatic as well as mobile advertising in 2021 and this trend is expected to continue over the coming years.
Global Digital Advertising Market (2020-26)
Global digital ad spend reached $537 billion in 2021, growing by ~33% from $404 billion in 2020. This is further expected to grow to $931 billion by 2026 at a CAGR of 15%.
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US leads the global digital advertising market with a market share of 40.6%
Developed regions including the US, UK, Japan and Germany constitute key revenue contributors for the global digital advertising.
- Moving towards a Cookieless future: Major browsers such as Google are expected to phase out third-party cookies in the next couple of years. As a result, digital advertising is shifting towards the use of first-party data, browser-based tracking data, and identity-based tracking data, which are expected to grow the cookie-less advertising segment by more than $12 billion in the total addressable market over the next 2 years
- Surge in digital advertising costs due to rise in demand: There has been a tremendous increase in demand for digital ad inventory post the pandemic without subsequent increases in the supply resulting in an industry-wide increase in ad price. For example, CPCs for search ads increased by 12% YoY for Q1, 2022
- CTV advertising continues to grow at a rapid pace: The continuing shift towards programmatic advertising channels as well as the growth of video-format ads is driving the CTV advertising segment, projected to reach $19 billion in 2022
- DOOH segment has been growing strong post the pandemic: As brick & mortar shopping footfall returned to pre-pandemic levels over the last year, advertisers increasingly invested in DOOH advertising. As a result, global DOOH ad spending is projected to grow by ~21% in 2022 to reach $16.6bn.
- Retail Media Networks are one of the most important trends of 2022 as an increasing number of US retailers invested in the same: US retail media ad spend grew by 53.4% to reach $31.5 billion in 2021, further projected to reach $41.4 billion in 2022. Leading retailers such as Walmart partnered with Trade Desk to launch its own DSP and Albertsons launched its own RMN, “Albertsons Media Collective,” in 2021. By 2026, the RMN market is projected to grow to $100 billion.
By The Numbers: The Booming AdTech Industry
- The industry attracted over $2.6 billion in funding during 2021, with DoubleVerify and Videoamp raising over $350 million and $275 million respectively
- During the same period, the number of M&A transactions grew by over 100%, with an overall deal value of more than $5.9 billion. Magnite’s acquisition of SpotX for $1.1 billion and Applovin’s acquisition of Mopub for $1.0 billion were among the notable deals
2022 and Beyond
The next few years look pretty promising for the AdTech ecosystem as it continues to attract increased investments from global investment firms as well as strategics. Advertisers are expected to increasingly invest in various sub-segments such as retail media as well as building first-party data capabilities as the world moves towards a cookieless future.
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